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PAGE 2 <br />INSURANCE <br />You are required to maintain, for the improvements located on the property, a policy of standard <br />fire and extended coverage during the life of the Note and Deed of Trust; in an amount equal to <br />the full replacement value of the improvements. The insurance shall contain a lender's loss <br />payable endorsement naming City of Redwood City as additional insured. The endorsement shall <br />read as follows: <br />City of Redwood City <br />Housing and Redevelopment Division <br />P. 0, Box 391 <br />Redwood City, CA 94064 <br />RESALE RESTRICTIONS <br />THE TERMS OF THIS LOAN, INCLUDING THE NOTE, SUBORDINATE DEED OF <br />TRUST, AND RESALE AGREEMENT, HAVE BEEN DRAFTED TO RESTRICT FUTURE <br />SALES PRICES (TRANSFER AMOUNT) AND APPRECIATION THAT YOU MAY <br />RECEIVEAT THE TIME YOU SELL YOUR UNIT. <br />The RESALE AGREEMENT gives the Redwood City Redevelopment Agency the first right to <br />purchase your unit at the time you decide to sell. The TRANSFER AMOUNT, defined in the <br />Resale Agreement, is intended to limit future sales prices so that the Redevelopment Agency may <br />continue to make these units affordable to future buyers over the next 30 years. The Agency has <br />a limited amount of time to exercise its option to purchase or you may find your own eligible <br />buyer. If the Agency decides to purchase your unit, the Agency is required to do so within time <br />limits specified in the Resale Agreement. The Agency may assign its right to purchase to another <br />eligible buyer, in which case, your remaining loan balance may also be assigned to that buyer, and <br />you will not have to pay your remaining loan balance at the time of sale. If you remain in your <br />unit for 30 years, the Resale Restrictions will cease to exist and you may sell your unit at Fair <br />Market Value at that time. Additionally, the Agency has built into the Transfer Amount, a shared <br />appreciation on your first mortgage and your down payment, which will be based on increased <br />median income; this appreciation will be shared 50:50 with the Redevelopment Agency at the time <br />you sell your unit. The Agency will use these funds to assist subsequent eligible buyers in this <br />development. <br />rofi3ec+�s��n <br />